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The field of decentralized finance is one of the most attractive to investors and a fast-growing part of the cryptocurrency market. It attracts many people with the prospect of potentially high returns at relatively low risk. A few years ago, skeptics predicted that the decentralized finance bubble would burst due to its rapid growth, but on the contrary, this sector has seen even more growth.



The rise of decentralized finance is also due to the popularity of cryptocurrencies, and their gradual acceptance by society and the state. New DeFi platforms are emerging almost daily, and leading international venture capital funds are actively investing in them. If the momentum continues and the cryptocurrency market continues to grow in 2023, we can expect the decentralized finance sphere to become even more developed and offer more opportunities.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="678" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-1024x678.png" alt="" class="wp-image-1176" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-1024x678.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-300x199.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-768x508.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25-1536x1017.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-25.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



So if you don&#8217;t know how to invest in DeFi, be sure to read this material. We will tell you what opportunities this field offers to investors and how to avoid risks.



<h2>How to invest in DeFi projects?</h2>



So, decentralized finance consists of an ecosystem of DEX, DeFi applications, stablecoins, DeFi tokens, and other financial tools based on blockchain (most DeFi platforms use the ETH network). These networks operate autonomously and cannot be controlled by any governing body. The financial services offered by the DeFi platforms are almost identical to the ones provided by traditional financial authorities.



But the most important advantage of DeFi applications is that anyone can make money with them. Of course, the industry is categorized as technically complex, so people encountering it for the first time may be intimidated. But, despite the newness of the infrastructure, the decentralized finance area is open to people who want to learn how to make a profit from it. Now, investing in DeFi projects can be done in a few different ways:



<ul>
<li>Direct DeFi investment. You can invest directly in some projects by purchasing DeFi tokens or coins through a DEX such as Uniswap or Sushiswap. You&#8217;ll need to have a digital wallet that supports the specific DeFi token or coin you wish to purchase.</li>



<li>DeFi funds. You can also invest in DeFi funds, which are managed portfolios of various projects. These funds are typically managed by a professional investment manager and offer diversification across multiple platforms.&nbsp;</li>



<li>Staking. How to stake tokens? Staking is the process of holding and keeping a crypto in a digital wallet to support the security and operation of a particular project. In exchange, investors receive rewards in the form of additional DeFi tokens or coins.&nbsp;</li>



<li>Yield Farming. This is the process of lending your crypto to a project in exchange for rewards. Yield farming can be a high-risk, high-reward strategy, and it is important to thoroughly research the DeFi protocol and understand the risks before participating.&nbsp;</li>
</ul>



Interactions in DeFi are based on smart contracts — special algorithms that ensure that parties abide by the terms of the contract. Today, smart contracts are used in a wide range of DeFi applications, including exchanges, DeFi lending platforms, stablecoins, prediction markets, insurance, and more.&nbsp;



It is important to do your analysis and understand the possible dangers of DeFi investing before making any decision. It is also recommended to start with small DeFi investments and gradually increase your holdings as you become more familiar with this ecosystem.&nbsp;



So, If you have no idea how to invest in DeFi and want to choose the most suitable option, you should sort out all the available solutions. We&#8217;ll look at both the DeFi investments listed above and a few new options.



<h3>DeFi tokens and projects investments</h3>



Investing in DeFi tokens is a way to buy assets in anticipation of their growth. The appeal of this DeFi investment approach is that a DeFi token has the potential to appreciate rapidly, sometimes by thousands of percent within hours of its release.&nbsp;



However, the high volatility of new crypto tokens presents a challenge. While it is possible to make significant profits quickly, the risk of loss is also very high. It is important to be aware of this danger and to carefully consider your strategy before you invest in DeFi tokens.



<h3>DeFi funds</h3>



These funds typically invest in a range of DeFi protocols, including those that offer DeFi lending, borrowing, DEXes, and other financial services. By investing in a diversified portfolio of projects, funds can help investors manage risk.



<h3>Stake crypto tokens or coins</h3>



You may have already searched for info on how to stake cryptocurrency. So, if you need passive income from cryptocurrency, staking is a great option. This means that assets are locked in a crypto wallet and all participants create a staking pool so that the network gets quality operational support. Also, the number of tokens in circulation is reduced, so the rate doesn&#8217;t decrease and the risk of inflation is minimized.



Staking is possible with ETH, BNB, and some other tokens of the network. To benefit from staking, you need to keep the funds in a crypto wallet. Rewards are paid by the network, so you don&#8217;t have to rely on third-party intermediaries. But DeFi involves other people using your tokens (not for free, but for interest).



<h3>Yield farming DeFi protocol</h3>



This is a popular DeFi protocol that allows investors to earn a return on their cryptocurrency holdings. In yield farming, people lend or provide liquidity to a DeFi protocol in exchange for interest or rewards. The strengths of this type of DeFi investment include:



<ul>
<li>The possibility of getting a good extra income.</li>



<li>You can influence the DeFi protocol by shaping it according to your needs.</li>



<li>High chances to invest in a promising token and earn a lot.</li>
</ul>



Farming became popular after the Compound DeFi protocol appeared. It distributed COMP tokens to those users who contributed funds to the platform or took decentralized credits. People get additional rewards, and the crypto project grows faster by encouraging participants to be active.



<h3>P2P lending</h3>



In decentralized lending, lenders and borrowers interact via blockchains. One person borrows in cryptocurrency at interest, leaving collateral in crypto as well. The investor, on the other hand, puts his assets into the liquidity pool and earns a profit. This is beneficial not only for the person who needs a loan but also for the owner of the cryptocurrency, who has free tokens and can lend them at a good interest rate.



<h3>Trading on the DEX</h3>



This is a way of trading on the exchange using borrowed funds. Leverage allows the trader to use many times the number of funds available. The trader borrows assets from lending DeFi protocols. Investments can be made by lending their unused cryptocurrency to people at interest. The risks of losing funds are controlled by smart contracts. Today, centralized exchanges are typically regulated by a central authority, while DEXes operate without intermediaries.



<h2>How much money do you need to use the DeFi protocol?</h2>



The amount of money required to use DeFi protocols can vary depending on the specific platform and intended case. Let&#8217;s look a little more closely:



<ul>
<li>For example, many platforms allow users to borrow or lend small amounts of cryptocurrency. People can deposit as little as $10 worth of crypto to begin earning interest or borrowing funds.</li>



<li>However, some protocols may require a minimum investment of cryptocurrency from your wallet to participate in certain features or earn rewards.</li>



<li>Additionally, it&#8217;s important to consider associated transaction fees, especially during periods of high network congestion on the underlying blockchain.</li>
</ul>



In general, many platforms have no minimum requirements for people who want to invest in DeFi, allowing users to start with small amounts of cryptocurrency. Don&#8217;t forget that you need a wallet to store your funds before you can invest in a specific project. Make sure you choose a wallet that supports the token or coin you want to use for the DeFi investing strategy. It is very important to review the features of the wallet and pay attention to its security mechanisms.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-1024x682.png" alt="" class="wp-image-1175" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-24.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h2>Choosing the right strategy to invest in DeFi</h2>



The strategy you choose determines how much/how long you invest and the list of assets in your portfolio. There are three main options: conservative, moderate, and aggressive. Next, you can select the assets:&nbsp;



<ul>
<li>Growth expects to grow for some reason, so you can sell in time to lock in profits in a short-term or long-term perspective.</li>



<li>Yielding generates passive income (when you stake tokens) or provides a stable option, such as stablecoins.</li>
</ul>



Given the main risks, a conservative strategy would be to invest in known projects using stablecoins. With an aggressive option, the person invests in growth assets and new projects with the expectation of high returns.



When choosing projects to stake digital assets or make investments, you must understand the market situation. You also need a special wallet to work with crypto (be sure to read about how to choose the best wallet). And in general, every investor should understand that this market remains volatile and risky.



This is a rapidly evolving field because new DeFi applications and projects are emerging all the time. Stay up to date on the latest developments in DeFi financial services by reading news articles, following social media accounts, and participating in online communities.

AlphaGuilty

How to invest in DeFi

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-1024x576.jpg" alt="" class="wp-image-1169" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



In 2023, many countries around the world have made significant strides in crypto regulation and have changed crypto taxes. But what&#8217;s the reason? Today, not only crypto investors, but other people are increasingly interested in digital assets, making the need for legal certainty for crypto in some countries urgent. In addition, the number of crypto transactions is on the rise day by day.



Right now, we&#8217;re going to summarize all the information about crypto taxes so you can get up to speed on this topic. This is very important because many people want to make money buying/selling digital assets, and crypto transactions can be made for large amounts.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1024x682.png" alt="" class="wp-image-1170" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h2>How is crypto taxed?</h2>



Now crypto taxes are levied on various operations conducted by businesses and individuals using digital assets. This leads to extensive discussions on more specific issues such as the need for licensing of crypto exchanges, crypto taxes, and other important topics. The situation is constantly evolving. Here are some general guidelines on how crypto is taxed:



<ul>
<li>Capital gains taxes. When you sell/exchange coins for fiat currency (e.g. USD, EUR), you may be subject to capital gains taxes. The gain/loss is calculated by subtracting the cost basis (the original purchase cost) from the sale cost. The crypto tax rate depends on how long you held the asset before selling it (short-term or long-term capital gains).</li>



<li>Mining. If you receive digital currency through mining, the value of your crypto at the time of receipt is considered income for crypto tax purposes. You may also be able to deduct expenses related to mining, such as electricity and hardware costs.</li>



<li>Crypto trade. When you trade one coin for another, it is generally considered a taxable event. The gain or loss from crypto trade operations is calculated based on the fair market value of the coins at the time of the exchange.</li>



<li>Spending coins. This means that you may be required to report the crypto transactions on your tax return and pay any applicable crypto taxes based on the fair market value of the assets at the time of the deal.</li>



<li>Airdrops. Receiving an airdrop from a project as part of a marketing campaign or promotional giveaway is considered taxable income. For crypto investors, it is important to report the amount received on a tax return.</li>
</ul>



So, It&#8217;s important to note that the crypto tax treatment may vary by jurisdiction. Therefore, it&#8217;s important to consult with a professional in this field or a financial advisor to understand the implications of crypto transactions in your country.



<h2>Do you have to pay crypto taxes?</h2>



So, coins/tokens are considered digital assets in the United States, and the IRS generally treats them similarly to stocks or bonds. Any gains from crypto transactions are subject to taxation, either as income or capital gains tax. Also, crypto taxes depend on factors such as how the cryptocurrency was acquired and how long it was held.



To determine if you have a crypto tax liability related to your digital asset, it&#8217;s important to analyze how you used it. Taxable events refer to transactions that are subject to taxation, while non-taxable ones have no crypto tax implications. Let&#8217;s look at cases where crypto investors have no obligations to the IRS:



<ul>
<li>Receiving coins as a gift is usually considered a non-taxable event, and you don&#8217;t have to pay crypto tax on the gift until you sell it.</li>



<li>If you donate digital currency directly to a qualified tax-exempt charity or nonprofit organization, you may be able to claim a charitable deduction on your tax return.</li>



<li>Transferring cryptocurrency between wallets or accounts that you own is not taxable. You can retain your original cost basis and purchase date to monitor potential crypto tax consequences if you decide to sell assets in the future.</li>



<li>When you stake ETH and possess ETH2 that generates staking rewards, those earnings are usually not taxable since they have not been released by the protocol.</li>
</ul>



Simply buying tokens on a crypto exchange and holding them is not a taxable event. In other words, crypto tax is usually triggered later when you sell it and realize the gain or loss.



<h2>How much crypto tax do I pay?</h2>



For example, in the United States, crypto is treated as property, which means that any gains or losses from crypto trade are subject to capital gains tax. It should also be clarified that the capital gains tax rate depends on the taxpayer&#8217;s income level and the holding period of the currency.



If the coins are held for less than one year, it is considered a short-term capital gain and the crypto tax is the same as the ordinary income crypto tax rate, which ranges from 10% to 37%. However, if the crypto is held for more than one year, it is considered a long-term crypto capital gain and the crypto tax rate ranges from 0% to 20%, depending on the taxpayer&#8217;s income level.



How can you simplify the crypto tax calculation process? A crypto tax calculator is a tool that helps calculate crypto tax liability related to crypto transactions.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1024x682.png" alt="" class="wp-image-1171" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h3>How to report your crypto on tax return</h3>



When you buy/sell coins, you are required to report any gains/losses to the IRS. Many exchanges provide reports about crypto transactions that include all activity in your account, making it easy to gather the necessary info for tax returns. However, if you have crypto transactions across multiple exchanges or wallets, the experience may be more complex.



So, to prepare your tax return, you will need to gather records of all your operations with digital currency. To simplify this process, you can use specialized tax software such as CoinTracker or TokenTax. This tax software allows you to input activity across all exchanges you use and generate a cost-basis report. However, it&#8217;s important to note that tax software may charge a fee for its service.



In the case of digital currency, the tax year for reporting is the same as for other investments. A tax year is a 12-month period for which taxes are calculated and paid. It&#8217;s important to understand the tax year in a particular jurisdiction and to file tax returns on time to avoid penalties or fines.



<h2>Conclusion about crypto taxes</h2>



If you carelessly or intentionally ignore crypto tax rules or regulations, you may owe a penalty. If you don&#8217;t pay the penalty on time, you&#8217;ll be charged interest. But what if you&#8217;re preparing your crypto taxes and realize you don&#8217;t have the money to pay? For example, you can apply for a repayment plan from the IRS (you&#8217;ll still owe, but you&#8217;ll avoid penalties for underreporting income).

How much does crypto get taxed

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-1024x576.jpg" alt="" class="wp-image-1166" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/DeFi-and-non-fungible-tokens-—.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



The blockchain consists of many of the same tokens that can replace each other. Therefore, even if the components of the blockchain are replaced, the system can continue to function as before without any changes. But there is another type of token called NFTs, which was created in 2017 based on Ethereum smart contracts.



At the same time, DeFi refers to a financial system that operates on a decentralized, permissionless blockchain, such as Ethereum, and is built using smart contracts. So, NFTs and DeFi are the two most commonly used terms in conversations about cryptocurrency and blockchain technologies. The world continues to explore the possibilities of these two fascinating fields of innovation, but how do NFTs and DeFi intersect? This is a very interesting topic and we will discuss it in detail today.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="540" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21.png" alt="" class="wp-image-1165" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21-300x169.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-21-768x432.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2>What are NFTs used for?</h2>



NFTs or non-fungible tokens are also one of the components of the Ethereum blockchain. It is impossible to split or replace NFTs because they are unique and differ from other blocks in the Ethereum network. This allows a person or company to secure their rights to a unique object that has been used successfully by artists and art venues. So let&#8217;s look at the main ways non-fungible tokens are used:



<ul>
<li>Non-fungible tokens on the Ethereum blockchain are used to represent unique digital assets such as art, music, video, and other forms of creative work.</li>



<li>These tokens are often bought/sold as collectibles, and their value can vary based on factors such as rarity, popularity, and historical significance.</li>



<li>By allowing artists to retain control and receive ongoing royalties for their work even after it is sold, these tokens have the potential to transform property rights and royalty systems in the creative industries.</li>
</ul>



Converting files into non-fungible tokens is a secure way to use blockchains to streamline the processes of buying, selling, and trading while drastically minimizing the occurrence of fraud. But when looking at NFTs from a financial perspective, they can be viewed as a store of value, similar to more conventional assets such as gold or coins. In this sense, each token represents a unique value that may be subject to market variability.&nbsp;



So, the similarities between NFTs and conventional financial systems are greater than many people realize. Rather than viewing DeFi and non-fungible tokens as potentially opposing concepts, it is important to recognize that they can have a close connection. NFTs are already being integrated into financial processes, demonstrating the potential of combining with DeFi. To understand how this merger can benefit individuals in both the real world and the metaverse, it is important to have a clear understanding of the definition and purpose of the DeFi ecosystem.



<h2>What can you do with DeFi?</h2>



Today DeFi enables a range of financial activities similar to those offered by banks, such as earning interest, borrowing and lending, insurance, trading, flash loans, and others. Moreover, decentralized finance works faster, more efficiently, and with greater security through the use of blockchain technology (most often Ethereum).&nbsp;



Users interact directly with each other without third-party providers. In addition, blockchains allow for the elimination of time constraints — the system can be used by any person 24/7, all year round. Let&#8217;s take a closer look at the definition of decentralized finance:



<ul>
<li>DeFi operates as a financial system, with the involvement of various blockchains, including Ethereum, to enable its ecosystem.</li>



<li>DeFi provides decentralized financial management solutions by incorporating tools like smart contracts.</li>



<li>The system of decentralized finance is completely transparent and open, unlike the alternative centralized services.&nbsp;</li>
</ul>



So, the definitions of non-fungible tokens and DeFi clearly show the possibilities of discovering the link between the two. But where do you start to see the connection between DeFi and NFTs? Looking at their definitions, you can see that NFT tokens offer a unique way to store value and DeFi space provides a decentralized infrastructure to unlock value.



<h3>What are smart contracts in blockchain?</h3>



As you may know, smart contracts are self-executing programs that run on a blockchain (Ethereum or another). They enable the automation of contract execution, validation, and enforcement without the need for a third party. In the context of our topic today, it is very important to reveal another thing. So, smart contracts play a critical role in both DeFi projects and NFT tokens:



<ul>
<li>In DeFi, smart contracts are used to automate lending, borrowing, trading, and staking, ensuring that all operations are performed correctly and transparently without the need for a broker.</li>



<li>In the case of NFTs, smart contracts are used to define the unique characteristics of the asset, such as proprietary rights, transferability, and authenticity. Smart contracts allow token creators to program certain conditions, ensuring that the artist receives a share of the profits when the token is sold/traded.</li>
</ul>



In addition, DeFi protocols are sets of self-executing programs that are encoded into smart contracts on a blockchain like Ethereum or another. DeFi protocols use blockchain technology to provide a more secure and transparent way to conduct various operations. Now you understand why we touched on this topic.



<h2>How does NFT token help in DeFi?</h2>



Now NFTs can play an important role in the DeFi space by providing unique assets that can be used as collateral for loans, traded on marketplaces, and used in other financial apps. For example, NFT marketplaces can integrate with DeFi protocols to offer new financial applications and investment opportunities. Let&#8217;s explore the different use cases of non-fungible tokens in DeFi:



<ul>
<li>Collateral for loans in DeFi. For example, a person can deposit tokens as collateral and borrow a certain amount of crypto, which they can then use for other purposes.</li>



<li>Users can provide liquidity to DeFi protocols by staking their NFT, which earns them a share of the transaction costs generated by the DeFi protocols.</li>



<li>NFT can also be used to create unique products in DeFi, such as prediction markets.</li>



<li>By holding an NFT, users can participate in decision-making processes related to the operation of the DeFi platform, such as voting on proposals or allocating resources.</li>



<li>NFT can be traded on marketplaces, allowing people to gain exposure to unique assets and providing new investment opportunities in the crypto field.</li>
</ul>



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="540" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20.png" alt="" class="wp-image-1164" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20-300x169.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-20-768x432.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



So, NFTs have emerged as a promising use case in the DeFi space, particularly on the Ethereum blockchain (with the introduction of ERC-20 tokens representing digital assets). NFTs can serve as proof of proprietorship for art and other unique assets, making Ethereum an ideal platform for creators to share and engage with collectors.&nbsp;With the ability to prove proprietorship, NFTs offer significant value propositions on the DeFi platforms. Most importantly, DeFi helps in revealing the value of a particular asset. The next few years will show how productive the process of merging NFT and DeFi technologies will be, and whether it will be able to attract new users to the ecosystem without any major problems for it.

How can NFTs be used in DeFi (decentralized finance)?

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-1024x576.jpg" alt="" class="wp-image-1158" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-decentralized-finance-1.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Today, DeFi and blockchain technology have become an integral part of the cryptocurrency economy and counterparts to the traditional financial system. Now people store money in a secure digital wallet and conduct financial transactions in seconds without intermediaries and third parties. Anyone with a stable Internet connection can use the DeFi application, plus it&#8217;s very convenient and transparent.



So we will be discussing a very important and relevant topic of DeFi work. DeFi is likely to be the fastest-growing trend in the cryptocurrency industry in 2023. That&#8217;s why both beginners and experienced crypto enthusiasts need to know how decentralized finance works and who can benefit from it.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="480" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19.png" alt="" class="wp-image-1157" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19-300x150.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-19-768x384.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2>What is decentralized finance?</h2>



This is a publicly available ecosystem of financial services and apps based on public blockchains (mostly ETH). DeFi also works without any centralized authority. DeFi covers all aspects of financial services and financial transactions (it can also be lending, borrowing, and trading).&nbsp;



At a time when the government is trying to centralize all financial services, a solution based on blockchain technology is just perfect. Any user can interact with decentralized finance and manage assets through P2P and dApps. Let&#8217;s take a look at all the major advantages of DeFi right away:



<ul>
<li>It&#8217;s transparent. The source code of DeFi applications is open, which allows anyone to understand the functionality of a smart contract or identify bugs. All transaction activity is public (financial transactions are pseudo-anonymous).</li>



<li>There are no centralized structures in DeFi and that&#8217;s great. All rules are written in a smart contract. Once the smart contract is deployed, the DeFi app can run autonomously, requiring minimal or no human intervention. Smart contracts govern all financial services.&nbsp;</li>



<li>Anyone can create and use the DeFi app. Unlike the traditional financial sector, there are no dispatchers or accounts that require complex forms to work with. Through wallets, users interact directly with smart contracts.</li>



<li>New DeFi apps can be created by combining other DeFi products (e.g. stablecoins or exchanges). This feature of DeFi is similar to a model in which a given structure can be assembled in various combinations. In addition, most of these apps are available to any user.</li>



<li>Decentralized finance also provides an adaptable user experience. If you don&#8217;t like the app interface, you can create your own. Smart contracts are like an open API for which anyone can build apps.</li>
</ul>



So, DeFi refers to a new financial system built on blockchain technology. In DeFi, apps are created using smart contracts on a blockchain, allowing for control and management of financial services or transactions without the need for third parties.&nbsp;



The DeFi ecosystem also consists of crypto assets, such as tokens, and stablecoins. Users&#8217; funds are stored in digital wallets. All transactions here are quick to execute, there is no long chain of brokers. This is convenient for deposits and lending. For example, the lender doesn&#8217;t have to share the profits with the bank, which accepts deposits at one interest rate and gives loans much higher.



<h3>Some disadvantages of DeFi</h3>



However, despite the many advantages, such financial services on blockchain technology also have their drawbacks:



<ul>
<li>One of them is the low performance of the system. This is because blockchains are slower than their centralized counterparts, requiring additional product optimization.</li>



<li>Another drawback is the high risk of user error. These apps transfer responsibility from intermediaries to users, which can be a negative aspect. Developing solutions that can minimize the risk of error is particularly challenging when products are deployed on top of a blockchain.</li>



<li>One more disadvantage is that development control is in the hands of one team. This problem is not always relevant, as some platforms involve working with users on improvements, but it is faced by many. In particular, challenges arise at the point where responsibility is delegated to the community.</li>
</ul>



In addition, this ecosystem is also characterized by instability. Finding the most appropriate app can be difficult, and users must have a certain skill set to choose the best option.



<h2>What does DeFi do?</h2>



DeFi&#8217;s primary goal is to change the conventional financial system, which relies on centralized institutions to facilitate transactions. Thanks to these technologies and open-source DeFi protocols, more people have access to new financial services, exchanges, and platforms. DeFi also helps users earn money on cryptocurrency assets and save on transaction costs. To make it easier to understand, let&#8217;s look at all the DeFi uses and how it works:



<ul>
<li>Generate ongoing income and rewards on your cryptocurrency by lending it out instead of receiving a monthly payout.</li>



<li>Secure a loan instantly and without the need for extensive paperwork, including access to ultra-short-term loans that are not available from traditional institutions.</li>



<li>Engage in P2P trading of selected cryptocurrencies, similar to buying and selling stocks without a brokerage intermediary.</li>



<li>Allocate your cryptocurrency holdings to alternative savings accounts and earn higher interest rates compared to traditional accounts.</li>



<li>Take advantage of long or short positions on specific assets, similar to the crypto counterpart of stock options/futures.</li>
</ul>



Let&#8217;s also talk about other ways to use this technology. You already know that stablecoins are cryptocurrencies whose value is tied to a fiat asset. MakerDAO, for example, offers another model of stablecoins. The issuance pattern of Dai&#8217;s stablecoins can be compared to gold-backed money. The distinction is that ETH cryptocurrency is used instead of gold.



Now let&#8217;s talk about exchanges, in this case, DEX (most people today have confidence only in these exchanges). It is a decentralized exchange, which doesn&#8217;t keep funds and users&#8217; info on exchange servers. Such an exchange acts solely as a platform for matching orders to buy/sell cryptocurrencies.



The system of these exchanges works in such a way that each transaction is conducted between users directly, and the exchange doesn&#8217;t access/store the crypto of its clients. Such exchanges offer a new model of crypto trading and exchange. One of the most successful and actively developing decentralized exchanges is Uniswap.



DeFi is also used to create prediction markets, services, and games (items in these games are usually non-fungible tokens that can be sold). The number of these projects is steadily growing. Some DeFi protocols enable liquidity mining and yield farming. The last concept refers to any action aimed at obtaining crypto for some kind of activity. It can be giving or taking credits, providing liquidity. Farming has gained a lot of popularity because of the opportunity to earn a good income.



<h2>What is the total value locked in DeFi?</h2>



Before you try to make money on a project, you need to analyze how dangerous it is to invest tokens or other digital assets there. This is where the TVL can help. One indicator of a project&#8217;s sustainability is how much funds other users currently have in its contract. Let&#8217;s understand what TVL is and why you should always pay attention to this indicator.



TVL shows the amount of blocked or frozen crypto funds on the project&#8217;s smart contract or liquidity pool. In other words, when you see the TVL abbreviation, it means how much cryptocurrency is currently invested in that particular project. The higher the number of funds, the better and safer it is for the potential investor.



With a high TVL, there is no risk of a sharp collapse of staking/farming. There will not be a situation where multiple users who have invested their tokens will take them out, sell the accumulated cryptocurrency and leave you with nothing. The more frozen tokens — the more people are interested, supporting, and developing this crypto project.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="960" height="640" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18.png" alt="" class="wp-image-1156" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18.png 960w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-18-768x512.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></figure>



<h2>Conclusion: how does DeFi challenge banking?</h2>



In a world where states are trying to centralize all transactions, this technology comes in handy. Now DeFi offers many of the same services as banks, including earning interest, borrowing/lending, buying insurance, trading derivatives/assets, and more. However, this technology is faster, more efficient, and doesn&#8217;t require extensive paperwork or a third-party intermediary in transactions.



Today DeFi could provide financial services and transactions that are more accessible, and inclusive. All applications are accessible to anyone with a smartphone or computer. This eliminates the need for a physical bank branch and allows people to participate in financial activities from anywhere in the world. Now, cryptocurrency is opening up new opportunities for innovation and growth in the financial area. So, this is a real contrast to ordinary banking, where a central government controls the system.



<h3>Is Bitcoin a decentralized finance?</h3>



BTC is considered a decentralized digital currency, but it is not a comprehensive DeFi on its own. However, some DeFi applications may use BTC as a form of collateral or payment.

What is DeFi

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Cryptocurrency-market-cap-1024x576.jpg" alt="" class="wp-image-1162" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Cryptocurrency-market-cap-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Cryptocurrency-market-cap-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Cryptocurrency-market-cap-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Cryptocurrency-market-cap.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Today the rise in the value of digital assets leads to an increasing inflow of new funds into the crypto ecosystem. Investors typically rate cryptocurrencies based on several factors and try to predict their long-term value. So, the market cap is often used as an argument when deciding whether to buy a particular coin or token.



Right now, we are going to tell you how to calculate the market cap of cryptocurrencies so that you can make the right investment decisions. It&#8217;s not as complicated as it may seem at first glance. To get newbies up to speed, let&#8217;s start with the basics and definition of crypto market capitalization.



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<h2>What is the market cap of cryptocurrency?</h2>



So, crypto market capitalization is a measure used to define the overall value and scope of the digital assets market. Bitcoin has long been at the top of the list for this metric. Market cap is determined by multiplying the current price of each coin or token by the total amount of digital assets in circulation.



Note that market capitalization does not always indicate the greater popularity of a cryptocurrency. Let&#8217;s take Bitcoin and Ethereum as an example:



<ul>
<li>BTC now has a much higher cost. As a result, it is far ahead of ETH in terms of market capitalization.</li>



<li>The total amount of ETH in circulation is much higher. About 121 million tokens are now in use, compared to 19.39 million BTC (as of January 2023).</li>



<li>However, because ETH is worth less, the market capitalization of this asset is more than half that of BTC.</li>
</ul>



When analyzing cryptocurrency, you need to consider the diluted market cap. By figuring it out, you can see how undervalued/overvalued a particular asset is. This metric is produced when you multiply the number of all coins that could exist by the price of each coin.



<h3>Calculating the market capitalization</h3>



As we said above, to determine the market capitalization, you need to multiply the current price of the cryptocurrency by its circulating supply. Let&#8217;s break this down a bit more so that you can easily make calculations in the crypto market:



<ul>
<li>Crypto market cap = current price x circulating supply. Let&#8217;s consider the first figure is $200 and the supply is 20,000 tokens.&nbsp;</li>



<li>Crypto market cap = $200 x 20,000 = $2,000,000. This means that the total cost of all tokens is $2,000,000 at the current price.&nbsp;</li>
</ul>



This is an important metric in a crypto market used by investors and analysts to check the size and potential of cryptocurrency. If you don&#8217;t want to do the math yourself, there are options such as Trading View or CoinMarketCap.



<h2>Are there any problems with a crypto market cap?</h2>



The formula for determining market cap seems simple, but there are several important things to consider. The main difficulty is that all metrics on the cryptocurrency market are not static. Every second the cost increases and decreases, and the assets are either issued or burned (if the protocol provides for it).



In addition, many coins are lost. Someone forgot a password, someone&#8217;s hard drive burned out, and in some cases, the assets were stolen. So, the figures quoted today are only close to reality. Everyone knows how many assets have been created, but whether they exist at the moment is a mystery.



<h3>Why should you care about the market cap?</h3>



First of all, it is an evaluation of the attractiveness of an asset on the crypto market. By studying this metric, you can see in which direction capital is moving, and this info is helpful when deciding to buy or sell crypto. Cap is also used to compare various assets and even economic sectors.



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This is an important economic indicator that helps to assess the open interest of investors. However, as practice shows, this fact doesn&#8217;t guarantee further growth of the asset. Make a balanced decision and don&#8217;t forget the risks.



<h2>To Sum It Up</h2>



The cryptocurrency market is very unstable and each exchange shows its pricing policy. This is why the figures of the market cap will not be the same at various times of the day. However, despite the impossibility of getting perfectly accurate figures, the crypto market continues to flourish and develop, attracting more and more investors.

How to calculate market cap crypto

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-find-new-crypto-projects-1024x576.jpg" alt="" class="wp-image-1146" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-find-new-crypto-projects-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-find-new-crypto-projects-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-find-new-crypto-projects-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/How-to-find-new-crypto-projects.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Almost every day new crypto projects appear and sometimes this process is difficult to follow, especially for newcomers in the field of blockchain technology. These can be both new coins and tokens of an already promoted developer, as well as assets with almost no capitalization and losing their cost in a moment.



So, today we will cover the topic of finding new crypto in detail. We will also talk about ICOs and IDOs, which are related to the emergence of tokens on the market.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="945" height="1024" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-15-945x1024.png" alt="" class="wp-image-1145" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-15-945x1024.png 945w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-15-277x300.png 277w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-15-768x832.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-15-1418x1536.png 1418w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-15.png 1477w" sizes="(max-width: 945px) 100vw, 945px" /></figure>



<h2>How do I get new cryptocurrencies and crypto projects?</h2>



Some people manage to find promising new crypto coins, invest in them in time, and make a profit. To find new crypto, you need to check many sources and find announcements or listings. If you are interested in making a profitable investment in new coins and tokens and want to choose a suitable option, you can use these ways:



<ul>
<li>Before tokens and coins appear on exchanges, they are often first presented as Initial Coin Offerings or Initial Dex Offerings. This is a great chance for investors to become part of a crypto project before it goes public and enters the mass market. Various platforms present future crypto projects with promising coins and tokens, including ICO Bench, Top ICO List, and CoinGecko.</li>



<li>CoinMarketCap is probably the most popular source for analyzing the whole market with new crypto projects or following only certain coins and tokens. This resource provides many useful tools that are suitable for forming a portfolio. And this platform also helps follow the release of new cryptocurrencies.</li>



<li>If you are an investor and an active user of cryptocurrency exchanges, you can follow listings in crypto projects news. Announcements with new cryptocurrencies are usually posted on the blog or even sent to your email in the form of a newsletter.</li>



<li>A very important thing for investors and members of the cryptocurrency community is to follow the news about new cryptocurrencies and trends on social networks. You can register in forums about blockchain technology and find bloggers or experienced traders who run info channels about crypto projects. All those who actively earn from coins and tokens are always aware of the latest news.</li>
</ul>



If you search for new crypto coins and use any of the platforms mentioned in the first points, you need to look for an ICO/IDO calendar or page with upcoming crypto projects. This way you can see how soon each event will start and what the goal is for a specific crypto project.



<h3>How often are new coins and tokens launched?</h3>



Different coins and tokens appear quite frequently, almost every few days. But an important characteristic is whether and how actively this crypto is traded. In fact, several assets may appear on the same day. That&#8217;s why you need to be able to search for promising new coins.



<h2>Is it safe to invest in new tokens and coins?</h2>



Many people look for promising projects in the hope to generate a large income in the future. However, expectations are not always met, as even trends fade. Finding a hidden gem is not as difficult. To reduce the risks, you do not need to invest all your money in one asset, just spread your investments wisely.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-14-1024x682.png" alt="" class="wp-image-1144" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-14-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-14-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-14-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-14-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-14.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Also note the official document, which contains info about the project&#8217;s use case, tokenomics, creators, and roadmap. Always consider the usefulness of the crypto and the specific use cases. For example, it should speed up blockchain transactions without sacrificing decentralization and security.



Remember that there are always risks associated with such investments, so be sure to allocate your funds properly and be responsible. So, if you&#8217;ve found a promising crypto and are wondering if it&#8217;s worth investing in, always read the whitelist, check out the Twitter page, get to know the development team, and keep an eye on the markets.

How to find new crypto coins

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-1024x576.jpg" alt="" class="wp-image-1141" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Security, affordability, and ecosystem – everything is great in Ethereum except the gas charges. That&#8217;s why Layer 2 solutions are the best option for Ethereum right now. Of course, we are talking about Arbitrum.



What about an Arbitrum airdrop? Let&#8217;s start by telling you that you can participate in the Arbitrum airdrop and exchange the points you earn for crypto tokens and rewards.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="897" height="580" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12.png" alt="" class="wp-image-1139" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12.png 897w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12-300x194.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12-768x497.png 768w" sizes="(max-width: 897px) 100vw, 897px" /></figure>



<h2>What is Arbitrum?</h2>



So, Arbitrum is a Layer 2 solution for Ethereum. This means that Arbitrum is directly attached to Ethereum and they work in sync, which allows:



<ul>
<li>Remove complex calculations from the core network and take most of the transaction validation work from Ethereum&#8217;s validators.</li>



<li>Decrease the cost of recording a transaction in blockchain by using rollups – transaction packets.</li>



<li>Improve upscaling and increase network throughput without compromising blockchain security.</li>
</ul>



Thus, Arbitrum is an add-on to Ethereum, where users can conduct transactions with ETH or other tokens. To send tokens, you can use both the native Arbitrum bridge and third-party services.



<h2>Arbitrum: How Does It Work?</h2>



Arbitrum uses a new concept, allowing developers to easily run smart contracts and apps with low charges and increased throughput. Arbitrum&#8217;s creators have managed to optimize the rollup structure to send a minimal amount of data.&nbsp;



The AVM virtual machine in Arbitrum is responsible for transferring operations from L1 to L2 and back. Three types of validators were added to Arbitrum, as well as a unique dispute resolution mechanism that minimizes the total load on the core.



This introduces a validation step for deployment blocks, where other validators check that the block is correct and send a validation request if they think it is incorrect. If it turns out that the block is wrong or the check is unreasonable, the stake is confiscated, ensuring that validators always play fair or risk the consequences.



Also, the Arbitrum platform makes it possible to run contracts with minimal modifications. Top exchanges, bridges, wallets, and many platforms support Arbitrum. Now more than 200 projects in total are already running on Arbitrum, including exchanges and NFT marketplaces.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="870" height="580" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13.png" alt="" class="wp-image-1140" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13.png 870w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13-768x512.png 768w" sizes="(max-width: 870px) 100vw, 870px" /></figure>



<h2>How to Get Potential Arbitrum Token Airdrop?</h2>



Want to participate in Arbitrum airdrop and exchange points for tokens? Arbitrum does not have a crypto token at the moment, but such a token will probably appear in the future. You can complete the tasks with AlphaQuest to have a chance to win a retrodrop and participate in a token airdrop from Arbitrum. Arbitrum airdrop is your chance to receive free tokens.



Right now there are a lot of suggestions about Arbitrum doing an airdrop and giving away tokens. Users who complete Arbitrum tasks are eligible to receive tokens in Arbitrum airdrop. Wan to join Arbitrum token airdrop? There&#8217;s no announced date for the Arbitrum token airdrop right now, but you&#8217;ll have a better chance of reaping the benefits when you complete these tasks.

Arbitrum

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Optimism_Drop_Hunt_Get_Crypto_by_Completing_Tasks_with_AlphaQuest-1024x576.jpg" alt="" class="wp-image-1136" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Optimism_Drop_Hunt_Get_Crypto_by_Completing_Tasks_with_AlphaQuest-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Optimism_Drop_Hunt_Get_Crypto_by_Completing_Tasks_with_AlphaQuest-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Optimism_Drop_Hunt_Get_Crypto_by_Completing_Tasks_with_AlphaQuest-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Optimism_Drop_Hunt_Get_Crypto_by_Completing_Tasks_with_AlphaQuest.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



The Ethereum network becomes busier. If people want to use Ethereum, they need to pay high fees. Now there&#8217;s a way to solve it. We&#8217;re going to talk about what Optimism is, Optimism airdrop, and OP to USD cost. We provide this material for informational purposes.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="872" height="580" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-10.png" alt="" class="wp-image-1134" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-10.png 872w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-10-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-10-768x511.png 768w" sizes="(max-width: 872px) 100vw, 872px" /></figure>



<h2>What Is Optimism (OP)?</h2>



Optimism is an open-source L2 solution for Ethereum. So, Optimism&#8217;s purpose is to resolve Ethereum&#8217;s upscaling problems, which cause users to face high fees and operational delays. Even the Optimism Foundation was established to promote the development of the ecosystem.



Optimism released OP crypto tokens via an airdrop. What about Optimism (OP) to USD rate exchange? On February 3, 2023, the Optimism token (OP) rate exchange to USD was equal to 3.19. According to market information, this was the maximum OP to USD rate.



<h2>Why is Optimism So Unique?</h2>



Optimism protocol uses new technology, which reduces the cost of commissions compared to the L1 infrastructure of Ethereum. Optimism enables easy deployment of any smart contract platform and apps written in Solidity. Optimism&#8217;s Ethereum has a capacity of 200 to 2,000 operations per second.



What is part of the ecosystem? There are now more than 60 trading projects based on Optimism. For instance, Velodrome/Uniswap trading exchanges are based on Optimism. This ecosystem also pays attention to the development of projects with NFT.



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<h2>How does Optimism Work?</h2>



Optimism, like other L2s for Ethereum, creates a second layer network on top of Ethereum. So, Optimism groups operations and processes some of the calculations to take the load off the main network. Ethereum, on the other hand, records the totals. This approach speeds up the project&#8217;s main Ethereum network.



<h2>How Is the Optimism Secured?</h2>



Optimism runs OVM, to provide security for Optimism, the OVM allows participants to challenge the authenticity of operations. When an operation in the Optimism network is challenged by a verifier, the entire packet is checked.



<h2>Optimism Drop Hunt (Airdrop)</h2>



The creators run an airdrop for the transition of Optimism to a new structure. This airdrop was made to gradually hand over control of Optimism to the community, so it was a great success and finished rather quickly.



Airdrop from the creators is long over, but you can still get Optimism crypto tokens for free. To get involved in the airdrop and gain free tokens, you need to complete tasks from Optimism. Now airdrop is a great chance to earn Optimism crypto without any investments. Just complete the tasks with AlphaQuest and win a retrodrop from Optimism earning crypto tokens!

Optimism

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There is no doubt that the popularity of LayerZero will continue to grow. From the moment crypto appeared, it was clear that blockchain would be the most promising technology. Now, this is a reality and we are constantly facing new challenges and problems. Blockchain is not easy: it is the inevitable cost of a secure and functional system.



But how can LayerZero protocol help and why LayerZero Labs has made a breakthrough? Today we will talk about that and also discuss a possible LayerZero airdrop.



<h2>What is Layer 0 protocol (Layer Zero)?</h2>



So, LayerZero is a special application that allows you to send and receive transfers between blockchains using the ULN model. It uses an oracle and a relayer for processing. In other words, LayerZero is an interoperability protocol (omnichain). Now LayerZero enables the realization of cross-chain applications with a low-level communication primitive.



<h2>How does LayerZero protocol work?</h2>



LayerZero allows you to achieve cross-chain operational compatibility and functionality. LayerZero uses the Chainlink oracle, which has one of the clearest and most robust security policies. So, if someone decides to perform some questionable operations with LayerZero, they will encounter protections that cannot be easily bypassed. Moreover, LayerZero provides uniform liquidity across all chains with guaranteed finality at the source chain.



<h2>Who is the team behind LayerZero?</h2>



LayerZero Labs is a startup based in Vancouver. The LayerZero Labs was founded in 2021 by friends who worked together in computer network research labs.&nbsp;



Sequoia Capital and Andreessen Horowitz led a $135 million Series A+ investment in LayerZero Labs, with additional investors including Coinbase Ventures and Uniswap Labs. The LayerZero Labs previously raised $6 million in Series A funding from Binance Labs, and Sino Global Capital, among others.



But what about LayerZero&#8217;s potential airdrop and free crypto tokens? LayerZero does not currently have a crypto token, and there is no official airdrop date yet. But it is widely expected that $ZRO will be launched soon. We know for sure that the $ZRO crypto token exists because you can see it in LayerZero&#8217;s info code.How you can get a $ZRO crypto token from LayerZero? If you want to have a chance to win a retrodrop from LayerZero, just complete some tasks on AlphaQuest.

LayerZero

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Aptos blockchains have generated serious hype in the crypto space, but is it that good? Aptos blockchain, created by a team of more than 350 developers, aims to reinvigorate the L1 with new ideas for consensus mechanisms, blockchain security, performance, and decentralization.



If you look at Aptos blockchain now, it&#8217;s the most hyped crypto project in recent memory. In a moment, we will discuss Aptos, APT tokens, and Aptos airdrops in more detail.



<h2>What is Aptos?</h2>



Aptos is a blockchain platform based on the Aptos BFT consensus algorithm. The project was founded by Aptos Labs, the team includes a staff of Diem (blockchain designed for Meta). Aptos Labs use a unique programming language called Move to create smart contracts.



What&#8217;s more, the Aptos Labs team raised $350 million in investment in 2022. According to Aptos Labs, the use of special execution technology allows the Aptos blockchain to achieve speeds above 160,000 operations per second. In addition, Aptos Labs engineers claim the delay is less than a second.



<h2>How to get Aptos crypto token</h2>



Aptos has a native APT crypto token, an airdrop was conducted among Aptos community members in October 2022. According to Aptos Foundation, a total of 20,076,150 APT tokens were issued to more than 110,000 users.



Today you can get Aptos tokens on major crypto exchanges like Coinbase. However, there is another option with AlphaQuest. All you have to do is complete the quests for a chance to win a second-wave crypto retrodrop and get some Aptos tokens.



<h2>What makes Aptos special?</h2>



Aptos is designed as a flexible, easily updatable platform for the ever-changing Web3 market. The MoveVM provides the interaction of users, applications, and smart contracts on the network.



In addition, the modularity of Aptos allows the network to be broken down into conditional segments for rapid deployment of applications and new mechanisms for using Web3 solutions. It also provides the ability to test protocol-level updates without having to shut down the network.

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